- Tag results for Roger Federer
The ATP Cup, announced by the ATP and Tennis Australia on Thursday during the ATP Finals in London, will be played from 2020 across three Australian cities over 10 days
The result means Federer is now in danger of failing to qualify for the semi-finals for just the second time in 16 appearances at the event.
The two men, with 34 Grand Slams between them, are the twin titans at the season-ending event at London's O2 arena.
Djokovic had secured World No. 1, following Nadal's retirement from the Paris Masters due to abdominal problems.
Naomi Osaka's 6-2, 6-4 win over Serena Williams quickly became infamous for the American's flare-up in the second set.
Djokovic, who will replace an injury-plagued Nadal at the top of the rankings on Monday, now leads Federer 25-22 overall and has not lost to the Swiss since 2015.
Federer, chasing a 100th career title, moved a step closer to that goal with a 6-4, 6-4 win over Japan's Kei Nishikori in Friday's quarter-finals in the French capital.
Djokovic was guaranteed a return to the ranking summit when Nadal withdrew from Paris with an abdominal injury on Wednesday.
Federer, 37, who captured his 99th trophy on home ground in Basel last week, will face Japan's Kei Nishikori on Friday for a place in the semi-finals in the French capital.
On his last appearance in 2015 he was knocked-out by American Jon Isner in the Round of 16.
If the holder of 20 Grand Slam titles lines up at Bercy it will be his first appearance at the last Masters' event of the season since 2015.
The top seed claimed his ninth trophy at his home event as he overcame an inspired opponent who took the lead early in each set but was pegged back by the 20-time Grand Slam champion.
The top seed, unbeaten in Basel since 2013, is an eight-time winner of his home event and will next play Frenchman Gilles Simon
The 37-year-old Federer will start his bid for a ninth Basel title on Tuesday when he plays Serbia's Krajinovic and could face a revenge match in the second round if he and John Millman both advance.
Djokovic overtook Switzerland's Roger Federer in the standings, pushing him down to third.